By Rachel Louise Ensign, Natasha Khan and Ruth Simon
Consumers are starting to freak out.
Dan Armstrong, a building manager and part-time security guard in Braintree, Mass., started getting spooked about three weeks ago when talk of mass layoffs and higher prices began dominating conversations with friends and colleagues who had never brought the subject up.. They started swapping tips on where to find the best deals for frozen food and gasoline.
On Friday morning, Armstrong, 63 years old, canceled his daughter’s high-school class trip to Spain to free up cash. The trip was going to cost him $322 a month until the trip in spring 2026. The single dad, an independent who voted for Kamala Harris, has also cut back on buying new clothes and ordering food from Grubhub, a treat he and his daughter used to indulge in once a week.
“Things look increasingly bleak for us for the next few years,” he said. “We are cutting back on virtually everything.”
President Trump’s stop-and-start trade wars and other rapid-fire policy changes are making Americans feel gloomy about the economy. Their 401(k)s are down, and their expectations for inflation are up. Now they are paring back spending on extras such as vacations and home-improvement projects.
The University of Michigan’s closely watched index of consumer sentiment nosedived 11% to 57.9 in mid-March from 64.7 last month. Sentiment among Democrats was the lowest ever recorded, including the depths of the 2008-09 financial crisis. Even Republicans are feeling worse, although many think that any short-term economic pain caused by Trump’s moves will be worth it. On a recent Sunday, Trump declined to rule out a recession.
Bleak sentiment about the economy can become a self-fulfilling prophecy. Nervous consumers tend to cut back, which weighs on spending and economic growth. While economists have been marking down their estimates for the economy, they still expect it to grow.
“The consumer drives the U.S. economy,” said Rebecca Patterson, an economist and senior fellow at the Council on Foreign Relations. “Where the consumer goes the economy goes.”
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